Darden currently owns more than 1,700 restaurants. Olive Garden and LongHorn Steakhouse had the best revenue growth among all of Darden's brands.
Casual dining may be losing business to chains selling faster-service food but a Florida-based chain serving up mostly Italian cuisine and steaks is defying the trend with plans to add restaurants.
Olive Garden and LongHorn Steakhouse, the company’s largest and best-known brands, each showed revenue growth exceeding industry averages.
The company added nine new Olive Gardens over the past year, six in Canada, along with eight LongHorns. Darden also added locations for Cheddar’s Scratch Kitchen, Yard House, Bahama Breeze, The Capital Grille, Seasons 52 and Eddie V’s Prime Seafood.
Darden is moving forward on plans for about 50 restaurant openings, 44 of which will be new and six will be relocations.
Much of the real estate is owned by private investors. Darden has a net lease with the landlord that puts most if not all of the property’s operating expenses on the tenant.
Investors have been favoring real estate leased to fast-casual chains over casual dining because of troubles with chains such as Red Lobster, which Darden sold several years ago.
Olive Garden is Darden’s biggest brand with 867 locations now.
LongHorn, now at 518 locations, had the highest percentage increase in revenue, rising 8.4% to $447.3 million.
Darden plans to open 15 to 20 new LongHorn, with California having the biggest potential.
Some of the locations could be taking over real estate vacated by a previous restaurant, if a building has a good enough structure.
Darden plans to release its fiscal 2020 third quarter results tomorrow at 8:30 am ET. Listen live at: https://investor.darden.com/investors/press-releases/press-release-details/2020/Darden-Restaurants-To-Host-Fiscal-2020-Third-Quarter-Conference-Call-On-March-19/default.aspx